The Board of Directors of COSCO Corporation (Singapore) Limited (the “Company”) wishes to announce that its subsidiary, COSCO Nantong Shipyard Co., Ltd. (“COSCO Nantong”) (being a subsidiary of the Company’s 51% owned subsidiary, COSCO Shipyard Group Co., Ltd) had signed a letter of intent (“LOI”) dated 24 March 2011 with Sevan Drilling Rig V Pte Ltd and Sevan Drilling Rig VI Pte Ltd in respect of 2 turn-key EPC (Engineering, Procurement and Construction) contracts (the “EPC Contracts”) pursuant to which COSCO Nantong will undertake to perform EPC and installation for delivery of two drilling units based on the Sevan design (Sevan 650). The contract price for each drilling unit is approx. USD525 million.
In addition, under the LOI, COSCO Nantong has also granted options to the Sevan Drilling Group or its nominees pursuant to which the option holders may order up to 2 drilling units similar to those under the EPC Contracts at a price of approx. USD525 million per unit. The effectiveness of the EPC Contracts is subject to the board approval of each of Sevan Drilling Rig V Pte Ltd and Sevan Drilling Rig VI Pte Ltd and the board approval of COSCO Nantong.
Formal agreements for the EPC Contracts and the options are expected to be signed at a later date. Deliveries of the drilling units under the EPC Contracts are expected to take place in the fourth quarter of 2013 and second quarter of 2014, respectively. None of the directors or controlling shareholders of the Company has any interest, direct or indirect in the above transactions.
The above transactions are not expected to have a material impact on the net tangible assets and earnings per share of the Company for the year ending 31st December 2011.